Bloomberg: Ukraine has sold 80% of its exportable wheat supply


By Anatoly Medetsky

Ukraine’s dwindling supply of exportable wheat means buyers wanting Black Sea grain may have to rely even more on Russia, according to UkrAgroConsult.

Wheat shipments from Ukraine in 2016-17 reached about 13.1 million tons by Feb. 6, according to the Kiev-based researcher. That’s more than 80 percent of the total expected for the season ending in June and compares with about 70 percent typically shipped out by this time of year.

While a smaller planted area reduced Ukraine’s harvest, the nation met much of the demand for Black Sea wheat earlier in the season after Russian farmers held on to high-quality supplies amid low prices, UkrAgroConsult analyst Liza Malyshko said by phone. Now, with prices rebounding to an eight-month high, Russian growers have started selling more high-quality grain as they offload a record harvest.

“The wheat-export program is almost completed in Ukraine,” UkrAgroConsult said in a report Tuesday. “Importers’ demand is expected to switch to Russian wheat.”

Ukraine exported 11 million tons by early February last year, according to the researcher. Top shipper Russia stands to benefit the most from any slowdown in Ukrainian exports because other Black Sea nations including Bulgaria and Romania have also shipped amounts close to totals expected this season, UkrAgroConsult analyst Marina Sych said.

In contrast, Russia still has a bigger share of its crop left to sell. It exported 17.7 million tons of wheat this season to Feb. 1, according to government data. That’s about 60 percent of the total expected by consultants including SovEcon and the Institute for Agricultural Market Studies, known as Ikar.

Last month, wheat with protein content of 12.5 percent or more comprised 95 percent of Russian exports of the grain, UkrAgroConsult said. That’s up from about 40 percent at the start of the season, when farmers preferred to sell cheaper, low-protein supplies first after too much rain hit crops before and during harvesting.

Russia is expected to export 29 million tons of wheat this season, up 14 percent from a year earlier, U.S. Department of Agriculture data show. Ukraine’s shipments will drop almost 10 percent after dry conditions during sowing reduced the planted area.

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